U.S. markets mixed as inflation steadies

Mixed Markets
Mixed Markets

U.S. stock markets closed mixed on Wednesday as a post-election rally showed signs of uncertainty. Key inflation data for October was in line with expectations, while third-quarter earnings results remained strong. The Dow and the S&P 500 ended in positive territory, while the Nasdaq Composite finished in the negative zone.

The Dow Jones Industrial Average (DJI) rose 0.1% to close at 43,958.19. At its intraday high, the blue-chip index was up more than 230 points. Notably, 18 components of the 30-stock index ended in positive territory, while 12 were in the negative zone.

The tech-heavy Nasdaq Composite finished at 19,230.72, sliding 0.3% due to weak performances by corporate giants. The S&P 500 edged up 0.02% (1.39 points) to finish at 5,985.38.

Eight out of 11 broad sectors of the broad-market index ended in positive territory while three sectors were in the negative zone.

The Consumer Discretionary Select Sector SPDR (XLY), the Real Estate Select Sector SPDR (XLRE), and the Energy Select Sector SPDR (XLE) advanced 0.9%, 0.8%, and 0.8%, respectively. The Department of Labor reported that the consumer price index (CPI) for October increased by 0.2%, in line with the consensus estimate and on par with September’s metric. Year-over-year, CPI increased by 2.6% in October compared to 2.4% in September.

Inflation-adjusted average hourly earnings for workers increased by 0.1% month-over-month and 1.4% year-over-year. The core CPI (excluding volatile food and energy items) for October increased by 0.3%, also matching the consensus estimate and the September figure. Year-over-year, the core CPI increased by 3.3%, unchanged from September.

Inflation data aligns with expectations

The three-month annualized rate for the core CPI rose to 3.6% compared with 3.1% from the prior three months. The six-month annualized rate remained at 3.3%.

Following the release of the October CPI/core CPI data, the CME FedWatch interest rate derivative tool indicated an overwhelming 83% probability that the Fed will reduce the benchmark lending rate by another 25 basis points in December. This probability was less than 60% just a day ago, suggesting market participants now expect a total 1% rate cut in 2024. Griffon Corp.

(GFF) reported fourth-quarter fiscal 2024 earnings of $1.47 per share, beating the Zacks Consensus Estimate of $1.21 per share. The company posted quarterly revenues of $659.67 million, surpassing the Zacks Consensus Estimate by 2.75%. Consequently, Griffon stock jumped 18.2%.

Arcos Dorados Holdings Inc. (ARCO) reported quarterly earnings of $0.17 per share, beating the Zacks Consensus Estimate of $0.16 per share. The company posted quarterly revenues of $1.13 billion, surpassing the Zacks Consensus Estimate by 3.97%.

Arcos Dorados stock rose by 2.4%. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.1 million barrels for the week ended Nov 1. The U.S. stock market reflected mixed sentiments on Wednesday.

Strong earnings reports helped buoy certain indices, while CPI data indicated steady but controlled inflation, hinting at potential future rate cuts by the Fed. Investors remain cautiously optimistic as they navigate post-election uncertainties and analyze key economic data.

Harper Johnson

Harper Johnson stands at the forefront of digital marketing, where she dissects and interprets the impact of online advertising trends, social media dynamics, and search engine algorithms on consumer behavior.

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